Pepco, BGE Outage Bills OK'd Under Energy Conservation Order

WASHINGTON, D.C. (WUSA) - 9 Wants to Know has learned that the controversial order thatallows PEPCO and BGE to bill for lost blackout revenue was intended toencourage energy conservation.

"It's difficult to understand the bill to begin with, andwhen consumers are alerted to the fact that there is this adjustment to makePEPCO whole when customers are saying hey, make me whole, people get prettyupset," said Eric Friedman with Montgomery County Consumer Protection."It adds insult to injury."

Although the order clearly states the reimbursements areintended "to implement energy efficiency," using it to bill customers who areconserving simply because there is no way for them to get electricity isperfectly legal.

Prior to OK'ing the billing in a January order, theMaryland Public Service Commission questioned whether it "inadvertentlyeliminated the incentive for the companies to quickly restore lost service tocustomers by authorizing the recovery of revenues foregone during extendedoutages."

Montgomery County officials objected to allowing theutilities to use the order intended to promote green power for reimbursingutilities when they can't bill customers because the lines are dead.

"To say to a customer, you've lost power for six or sevendays, you've thrown out all the food in your refrigerator and you're toldyou're going to pay a little bit extra," Friedman said."All because PEPCO lostmoney because you weren't buying electricitybecause they weren't delivering any electricity."

Despite the scrutiny, the commission allowed the billingto continue, but on a more restricted basis.

"The intent of decoupling (separation of energy andenergy delivery sales) was never to assure 100 percent recovery of costsregardless of utility performance during Major Storms," the January order stated."The BSAs were adopted to remove thedisincentive utilities faced to implement energy efficiency."

Officials say the order was originally intended to help utilities manage the dips in revenue created by supporting energy conservation programs.

In January, the Commission restricted utilities topassing on costs for lost power delivery fees to the first 24 hours of theoutage.

Utility spokesmen say you won't see the cost until Augustor September.

"For BGE, the impact of the 24 hour period would notaffect customers' bills before the fall," said BGE spokesman RobertGould. "Our expectation is that the 24 hour period will equate to lessthan 50 cents per customer"

PEPCO wouldn't provide an estimate of what it would costits customers and officials are split on estimates.

An attorney with the state consumer division Office ofPeople's Counsel estimated it would be less than a dollar per person.

A spokeswoman for Maryland Governor Martin O'Malley saidit could be less than a dime for each customer.

"In the event of an outage like we just saw, they canonly apply that charge to the first 24 hours of the outage," said O'Malleyspokeswoman Raquel Guillory."So, themost PEPCO customers will pay is about 13 cents. For BGE customers, thatwould be about 8 cents."

According to the order, Pepco has recovered the most fromcustomers under BSA, but that was prior to regulators restricting thereimbursement to the first 24 hours.

In a July 2010 storm it recovered $1,392,197 while BGErecovered $81,319 and Delmarva billed customers for $35,017 in lost revenue.

If you know about questionable utility activity, government waste or corruption e-mailtips@wusa9.com.